Consumerism and Keynesianism

Consumerism and Keynesianism

Many today believe that our selfish, consumerist society is a product of capitalism. That capitalism promotes a constant desire for consumer goods, that it encourages constant consumption, and that it can never be satisfied, thus constantly creating new markets for capitalist goods. I propose that it is not capitalism that is to blame for our selfish, consumerist society, but is the fault, and program of the Keynesian, crony-capitalist, mercantile system that we actually live under.

Capitalism – true laissez faire capitalism – is supported not by consumer spending alone, though this is obviously an important component, but on savings and investment. No products can be create, and no needs satisfied until something is created. Products cannot be created without investment. In a true capitalist system, without government interference and manipulation, the only means to gaining investment funds is through individuals being willing to invest their savings, or surplus, income. In a true capitalist system savings comes before investment and is the fuel that helps grow business.

In the Keynesian, crony-capitalist model, it is spending or consumption that drives an economy. The Keynesians believe that savings is equated with hoarding and is bad for the economy when the economy is sluggish. The Keynesians wish to stimulate the economy either through encouraging individuals and businesses to spend, in times where they would otherwise save, by lowering the interest rate to a point where there is no benefit to savings and spending is encouraged through cheap credit.

This encouragement to spend is part of the reason we live in a consumerist society. Demand is artificially encouraged through low interest rates and high rates of liquidity through the printing of massive amounts of fiat currency. As money floods the market the value of money drops and also the desire to hold money, or save, as one must spend the money before it loses value. Banks lend and people spend. The system becomes perpetuated not on real wealth creation, but on money printing and artificially low interest rates. The system is so corrupt that more of the same policies must be continued in perpetuity in order to keep the entire system afloat until all real resources and assets are spent, at which time the entire system will come crashing down.

True laissez faire capitalism on the other hand depends on a stable money supply, one that cannot be easily inflated or manipulated. It depends on people saving their excess revenues and investing it in business and new enterprises. It is based on a solid foundation of real and sustainable economic principles where people have the opportunity to build wealth, and thus businesses have consumers that are truly capable of affording their products without going bankrupt.

In a true capitalist system prices are stable over the long run and there are periods of short term deflation where new innovations and growth create cheaper production processes that in turn help to drive prices down. The Keynesian system seeks constant inflation ever driving prices up and decreasing the buying power of the consumer.

True capitalism enriches individuals and makes society wealthier. Keynesianism, or crony-capitalism, increasingly makes individuals poorer and more reliant on the corrupt system that is at the heart of the Keynesian enterprise. In capitalism, entrepreneurs are constantly innovating making better and cheaper products while in the Keynesian system big, uncompetitive industries are protected in the name of stability and new enterprises are regulated out of the market.

Capitalism is not to blame for our problems. It was responsible for the greatest growth in human wealth and productivity in human history. Keynesianism is the greatest threat to human freedom and prosperity. It is control of the economic means by a controlling elite. One brings wealth and prosperity, the other stagnation and poverty.

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